Mega exemption sub contractors

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This query is : Resolved

Ashis Agarwal (Querist)

07 December 2015
M/s T Ltd has been awarded a Dam Construction contract at North Bengal. The said company, hereinafter known as the contractor, awarded the said contract to my client, M/s A, hereinafter known as the Subcontractor.

As per the contract order, the boulders, gates, stoplog, hoists, cranes and rack & racking machine would be supplied by the contractor and the subcontractor shall erect and assemble them. Any other materials that will be required during the construction shall be brought and fitted by the csub contractor and the sub contractor shall fix tents for the employees and use diesal for producing electricity for the execution of the contract.

The Sub contractor used electrodes, oxygen pipes and other materials during the execution of the contract.

Now, the Service Tax officer (Superintendent) is of the view that the contract executed by the sub contractor was in the nature of labour contract and hence not eligible for exemption from service tax.

Please advice us

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 December 2015 As the sub contractor uses electrodes, oxygen pipes and other materials during the execution of the contract it is a works contract not labour contract, eligible for exemption from service tax.

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